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Intel Official Quits Computer Memories Board

February 02, 1988|JAMES BATES

Laurence R. Hootnick, a senior vice president with Intel Corp., has resigned as a director of Computer Memories, a former maker of computer disk drives in Chatsworth.

The resignation comes in the wake of an agreement last month by Intel, the giant Santa Clara semiconductor company, to sell its 1.7 million shares in Computer Memories for nearly $3.5 million, or $2 a share, to dissident shareholder Sun Equities. Sun, which owns nearly 10% of Computer Memories, has said it wants to gain control of Computer Memories to head off a planned merger with DIC, a Burbank cartoon producer.

Computer Memories has been a shell company for about 18 months. Although its stock continues to trade and it has $25 million in cash, it has no continuing business. DIC is interested in merging with Computer Memories as a cheap, easy way to become a publicly held company and for the cash.

Intel's shares amount to about a 15% stake in Computer Memories, which cost it about $4.6 million in 1982. The shares were worth as much as $50 million in mid-1983, when Computer Memories' stock peaked at more than $30 a share.

At the time, Computer Memories was a thriving maker of disk drives, or devices that store and retrieve data on rigid disks in personal computers, until it was dropped by IBM as a supplier for its PC-AT computer in August, 1985.

Sun is a New Jersey company led by investors Paul and Natalie Koether. Under terms of the sale, Computer Memories has until Feb. 14 to decide if it wants to buy the Intel shares itself for the same price that Sun will pay.

In an interview, Hootnick said there is no reason for him to be on the board now that Intel has decided to sell its shares.

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